Scott approves loan to keep Fla. courts afloat

TALLAHASSEE, Fla. (AP) _ Gov. Rick Scott has approved a $45.6 million loan so Florida's court system can avoid an impending deficit due mainly to a decline in mortgage foreclosure filing fees.

In a letter Tuesday to Supreme Court Chief Justice Charles Canady, Scott's budget director, Jerry McDaniel, wrote that the money must be repaid by next June 30 when the current budget year ends.

The court system's shortfall is expected to total $159 million by then. Canady in the meantime plans to ask the Legislature for additional funds to repay the loan and cover the rest of the shortfall. Lawmakers will convene their annual 60-day session on Jan. 10.

It's the second time this year the courts have borrowed money from the state's reserve accounts largely because revenue from foreclosure fees failed to meet expectations.

Scott approved a $19.5 million loan in April to tide the courts over until the end of the last budget year because of a $72.3 million shortfall. Scott also approved a $14 million funding shift within the court system. The courts then cut spending and received a supplemental appropriation from the Legislature to repay the loan and cover the rest of the shortfall.

The courts rely more heavily on fees from foreclosure filings because they are higher than those for other kinds of cases.

Foreclosures, though, have been very volatile. A large number of cases have clogged Florida's courts since the housing bubble burst, but they dropped off last year. Lenders held back on new cases due to problems that included lost paperwork and erroneous filings.

State economists expected the filings to pick up in the new budget year. It didn't happen to the extent expected so they've now reduced the court system's revenue forecast.

The current budget includes a provision requiring court officials to work with local court clerks on developing “appropriate revenue streams'' to pay for both entities and report back to the Legislature by Nov. 1, McDaniel wrote in his letter to the chief justice.

He asked Canady to also send a copy of the report to the governor's office to help Scott address court funding in his annual budget recommendations to the Legislature.